August 31, 2016; Diane Coyle on GDP: Rethinking the Uncountable

The McAlvany Weekly Commentary
with David McAlvany and Kevin Orrick

“A lot of Americans, a lot of Britons, a lot of other Europeans, have not seen any progress in their standard of living. I think that’s one of the reasons we’re seeing uncivil political debate that both sides of the Atlantic are having these days. People are angry that they don’t have something for their children and grandchildren to look forward to. And that’s partly about building for the future. It’s partly about making sure that the gains are widely shared, as well.”

– Diane Coyle

Kevin: We have a guest today, Diane Coyle, who wrote a book that I would imagine many people might miss, based on the title, because it’s about GDP, Gross Domestic Product.

David: But if you look at the subtitle, oh, it’s so intriguing, and so enticing. GDP: A Brief but Affectionate History (laughs).

Kevin: (laughs) It does draw you in when you see that.

David: Diane received her Ph.D. from Harvard University in Economics, and is presently a research fellow at Oxford University Smith School of Enterprise and Environment. She has written a number of books: The Economics of Enough, The Soulful Science, What Economists Really Do and Why It Matters. Most all of her books are published by Princeton University Press, and of course you can get them at Amazon or anywhere online. I would encourage a read of GDP: A Brief but Affectionate History, because this is a number that to some is enigmatic, to some is taken as an article of faith, but as you get into the book you realize that it is, on the one hand, very important, on the other, very flawed.

Kevin: It has a dramatic impact on our lives because politicians are looking at it, economists are looking at it, central bankers are looking at it. People are looking at GDP of various countries to compare. I was watching the Olympics a couple of weeks ago, and it really strikes me as strange that we have these medal counts, every day the news comes on and tells you who has the most medals. There is a whole lot more story to some of the events than who has the most medals. Actually, GDP, very similar. What do you pay attention to? Is it how many medals that you have? In this particular case with GDP is it how much spending a county does? How does that measure quality? How does that measure quantity? Diane, in her book, is very critical of the measurement and says we really need to rework the measurement.

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David: Diane, I was very interested, as I picked up your book, GDP: A Brief, but Affectionate History, first, by one of the comments on the back of the book. Harold James is a regular guest on our Weekly Commentary, and something that is important to him has become important to me. I’ve gotten so much from the bibliographies and the books that he has written. I knew that I had to read your book, and it was very rewarding to do so. We have a simple definition of GDP, which is the way we measure, the way we compare, how well, or badly, economies are doing.

And there is message communicated here which may even have a delicate political importance. Early in your book you tell a story of a man accused of betraying the national interest in Greece for not cooking the books, carrying a potential life sentence. Is GDP really that important?

DIANE: It is, and it has become more so over time, It think as we have grown used to using GDP as not only a measure of how the economy is going along month to month, but for all kinds of rules, things like how much bond repayments need to be for countries like Argentina and Greece, things like the fiscal rules that European countries are supposed to follow. They are all expressed in terms of ratios of GDP. That is why the Greek case, which has taken off again, the poor man, Andrew [unclear], is under new legal threat this week. That is why it becomes such a fraught and political question, as you are suggesting.

One of the things that looking at the history of GDP taught me is that it just can’t bear the kind of weight that we’re trying to put on it. People have thought about the economy in different ways over the decades and centuries. In fact, even the idea that there is something called the economy as a separate sphere of life is relatively modern. The way that different states and governments have assessed how the economy is doing has changed dramatically over time depending on political imperatives.

DAVID: Some groups challenge the primacy of that figure, GDP, complaining that it either over-emphasizes growth. Other people even point to it being a statistic subject to political manipulation. Maybe you could lead us through its history and contrast its limitations and its usefulness.

DIANE: History, what we use now, dates back to the Great Depression, really, when for the first time governments in the United States and the U.K. and elsewhere wanted to have a measure of the economy in the aggregate. That was partly because the expansion of the franchise meant that for the first time voters were holding them accountable for what happened. There had been great ups and downs in the business cycle in the Victorian era, but people treated those as something like a natural disaster. The government wasn’t meant to do anything about it. So there was this new demand to which governments responded and people like Simon Kuznets, a very well-known economist, started work on how you would define an aggregate measure.

Then the second world war came along and the imperative changed. It wasn’t a question of putting people back to work anymore, it was a question of understanding the resources of the economy, what was available for the war effort, what kind of sacrifice consumers were going to have to make. And this effort was led by John Maynard Keynes, who alongside that had his theory about how the economy ought to be managed to avert the kind of catastrophe that we had seen so recently in the Great Depression. So this idea of managing the level of aggregate demand was developed alongside the actual statistics for GDP.

And that framework very much determined what we look at now. It differed, actually, from what Simon Kuznets had wanted. He had wanted a measure of economic welfare. He had wanted to exclude bad things. He wanted to exclude paying for defense, and for example, advertising, too. And excluding defense wasn’t going to wash during the war so that one got dropped.

And so, some decades, 20 years, passed. There was quite a lot of debate about the definition of GDP, but over time we just kind of got used to it. And bringing in the politics again, during the Cold War the emphasis was very much on GDP growth and how well the economy was doing as one of the manifestations of how the West could do better than the communist countries. So it’s always been political in that sense.

But then as your question said, there have always been challenges, too, and often they go back to that initial debate. Should you be measuring activity in the ways that the government can manage the economy, or should you be measuring economic welfare in a broader sense, as Kuznets argued. One of the earliest challenges came from environmentalists who pointed out that GDP doesn’t take account of the ways that we use natural capital and resources to grow the economy, and doesn’t take account of externalities like pollution’s imposed costs on people. So they would argue that GDP overstated real economic growth in some sense.

And then on the other hand, what it doesn’t do is account well for innovation. There is a whole set of reasons why it’s very hard to measure how much innovation is contributing to the economy. If you could do that better, then GDP growth would look much bigger than the recorded statistics that we have. But the message, really, is that it isn’t a scientific object. Measuring the economy is not like measuring the height of the mountain or the depth of the river. It’s much more judgmental than that. And we ought to be thinking very carefully, in my view, as the structure of the economy changes, as we become aware of some of the limitations of GDP, we ought to think much more carefully about some of those fundamental questions dating back to the 1930s and 1940s.

DAVID: In the U.S. we witnessed government expand its economic footprint considerably during and after World War II, and for centuries prior to that government had played a small role in economic life. Now, you look at GDP, and government spending is one of the critical elements in that statistic. Was the real transition post-war to the generally accepted notion that government could better direct resources in the private sector? And here is this government statistic, to a degree, providing evidence of effectiveness, supporting that view of Keynesian demand management – yes, this is a new scientific approach for the future – where in essence, that number proves out that government can and should control more, and they’re doing a good job of it.

DIANE: It wasn’t just the United States, of course, it happened throughout the OECD economies, throughout the Western World, and actually, also, in developing economies as they grow a share of government activity, and the economy, as a whole, grows. And I think it’s a mixture of partly that Keynesian framework for thinking about managing aggregate demand. But also, partly that as societies become more complex there are aspects of consumption that are better done collectively, and I supposed investing in infrastructure is the classic example, and I think there is quite a lot of evidence that having good infrastructure – roads that work well, airports that work well – is a major contributor to private sector productivity as well.

So I think I partly agree with your argument that this was a kind of theory-based choice about the need for a greater role of the government in the economy. But also partly a reflection of the demand for democracies and the complexities of modern economics.

DAVID: Let’s talk about a few of the inputs in the number, which can dramatically alter it. You have seasonal adjustments, you have weightings assigned to elements in the inflation calculation, which then become a part of the deflator. You say this in your book: “The seemingly technical issue of how best to calculate a price index has some profound implications. In short, the choice of techniques completely alters even broad outlines of the big picture on economic growth.” But couldn’t you also say that changing those variables allows you to craft a political narrative?

DIANE: That’s a very interesting question. I don’t know that I would use the word political in front of narrative, there. It certainly allows you to change the narrative. Let me give you a more recent example. There is a really prominent book by Robert Gordon that is attracting a lot of attention at the moment about the long sweep of American history, the rise and fall of American growth. His argument is that productivity growth was high during the 20th century from something like the 1920s or 1930s through to the later part of the century, and it has now declined, and permanently so, and we need to get used to a much lower rate of productivity growth.

This book has been very favorably reviewed by another eminent economist, William Nordhaus, recently. Nordhaus recalculated the productivity figures that Robert Gordon uses by using a different deflator. He takes more account of the role played by innovation for new goods in calculating his deflator. And although he gets the same sort of pattern with an increase in productivity growth in the mid-20th century, it’s much less pronounced, so it’s a much less dramatic story than the one that Robert Gordon is telling.

So these narratives do change and clearly people do put a lot of, I suppose, ideological, or theoretical weight on the stories that you tell with the statistics. I don’t think it’s so frequently party political, I don’t think it’s a right wing versus left wing issue so much as a, “What is your world view about?” – the sweep of economic history. And the statisticians, themselves, when they are calculating the figures, are following rules set down in international committees that take 10 or 20 years, and they are not thinking about it at all in this kind of context. So to the extent that it is theoretical, ideological, that comes from the people doing the theory, not from the people calculating the numbers.

So I think, examples of fiddling the numbers for political purposes do occur, but they’re much rarer. They do occur in calculating unemployment statistics and there have been episodes in both the United States and the United Kingdom, where people have thought the government was changing the definition to make the unemployment picture look a lot better. And partly in response to those examples, most statistical agencies are now independent of government. They have some governance framework that makes it much harder for politicians to interfere with the definition.

DAVID: One of the scenarios you described was the economic turbulence of a particular period of time, which opened an opportunity for Margaret Thatcher to come to power in Britain. In retrospect, looking at things using a different economic methodology, maybe things were not as bad as perceived at the time, and maybe we would have had a different political outcome had there not been the perceived threat of the day. If we change the methodology, can’t we, to a degree, rewrite economic history?

That Maggie Thatcher period comes to mind, and then also, more recently, with research and development, shifting to an investment category, if you take that, and then look back through time and apply those numbers through past economic periods of recession, many of those past recessions disappear, simply by changing that one issue, R&D becoming investment.

DIANE: These are both great examples. The 1970s case, the government deficit, the budget deficit, and the balance of payments deficit in the United Kingdom looked terrible, and both figures were later revised to make them look much less serious, and if the latest figures had been available, Britain might not have needed to ask the International Monetary Fund for a bailout, the election result in 1979 which brought Mrs. Thatcher to power might just have been different. These counter-factual histories are great fun, but who can tell? I don’t think anybody thought the British economy was in a great state then anyway, so perhaps, actually, Mrs. Thatcher would still have come to power.

But your broader point is absolutely correct, that if you re-categorize something, then you can tell a very different story about how the economy is doing. And the lesson I take from that is that we just put much too much weight – and politicians, in particular, put much too much weight – on the GDP numbers. And when the numbers come out each quarter they are often a figure like 0.2% in the quarter, or maybe it changes from 2.2% to 3% if you annualize the figures. These are really small changes in the context of the uncertainty and the definitional questions about what goes into GDP. Simply revisions, because better statistics get collected to put into the data over time, the way you change your seasonal adjustment program can significantly change one quarter’s figures, depending on the timing of the days – they’re just highly uncertain. And people don’t pay enough attention to that great margin of error in them.

The Bank of England, when it publishes its forecast each quarter, presents a range for what GDP growth might be in the years ahead, but it also presents a range for what it thinks GDP growth is now and in the past, taking into account revisions and uncertainties like that. At the moment it’s saying, for the U.K., that’s a number somewhere between 1% and 5%. That’s a huge difference in how quickly people’s living standards are improving. So we have got ourselves into this trap where we’re judging political outcomes by numbers which just won’t bear the weight we’re trying to put onto them, and I think people need to be much more cautious when they hear any of those statistics, or even more when they hear somebody telling a story on the basis of those statistics.

DAVID: You point out that wartime can increase government expenditures and increase GDP, which doesn’t necessarily capture the balance sheet costs to a nation, because GDP focuses on the flow of income, expenditure, and production from year-to year. To a degree, you have this statistic, GDP, which kind of covers over the broken window fallacy. “Let’s break something, we’ll fix it, and then count the fixing as a boost to economic activity. Looking at war, I think we would all be better off if we accepted slower growth rates in peacetime (laughs). What are your thoughts?

DIANE: That’s absolutely true, and the massive destruction of assets, either in wartime or natural disaster, or even in something like the logging of the Amazon, those asset destructions don’t get counted anywhere in the figures. It’s starting to change slowly. Some of the data is available, but nobody pays attention to it because it isn’t captured in that single GDP number that we’re focusing on. And of course, we ought to do that. It’s making us very short-term. And if you look at the published figures for European and Japanese growth over the course of the 20th century, and you’re just looking at GDP growth, then of course it looks like the 1950s were fantastic, but as you are suggesting, they were fantastic because there was so much repair work to do. Never mind the human cost, I’m just talking about the buildings and the roads and the infrastructure and so on. Was that really a good thing, taking it altogether? Well, probably not as much as you would say looking at the GDP numbers, and yet people think about that as a glorious period in the history of the Western economies.

DAVID: We’ve talked about the flow of income, expenditure, production from year-to-year, and we just commented on the destruction of assets. We discussed war as an activity that can improve GDP growth, with huge costs to life and other national assets. What about debt? Debt tends to super-charge present economic growth by drawing future spending into the present, yet, the liability remains with us. And that is not reflected in GDP growth rates, so we can have a very impressive number and yet, looking down the line, we may have burdened future generations with the payback.

DIANE: We certainly have, and there are no countries that do a very good accounting of the burden that they are imposing on future generations. Whether that is the straightforward fiscal burden of government debt, whether it is the burden in terms of future generations paying for the pensions of the baby boom generation, or whether, for that matter, it is in terms of the running down of infrastructure that hasn’t been repaired or invested, or the running down of natural assets. And it has made us a very short-termist kind of society, and the politics, of course, plays into that because of election cycles, so there is no incentive for politicians to want to be at the forefront of taking a long-term perspective.

But I worry about it a great deal and my models are the Victorians, who built infrastructure and institutions that were going to last for 150 years, and in many ways the growth that we’ve experienced has been coasting off their legacy. We’re not leaving anything like that kind of legacy for future generations, and I think the statistics are important in trying to get people generally to focus on that issue, so I would really love it if governments would start to publish better statistics, in all those categories of assets, all those balance sheets, and again, the official statisticians collect some of the data. It’s not an impossible task, but the effort has to go into doing it.

DAVID: When you reference the Victorian models and building something that lasts 150 years, I recall the language of Charles Goodhart’s Law, “The measure becomes the target.” And I love your anecdote in Chapter Two where the communist authorities during the Cold War gave factory managers a measure of success, a total weight of shipments out of the factory. Maybe you can remind us of how, when you make quantity a target, you can obliterate or compromise quality.

DIANE: This is a very widespread problem with targets, as witness the fact that is has a name like Goodhart’s Law, and people are incentivized to hit their targets, and in the case of the Soviet Union, the incentive was pretty strong because if you were running an important factory and you didn’t, then you maybe got sent to the gulags, so that was quite a strong incentive. If the target was set in terms of weight, the easy way to deliver that was to put a brick inside every television that you were manufacturing, so that increased the weight of all of the objects.

And of course, it distorts other incentives, too. No incentive to innovate, so technology gets more and more behind if you have targets that are just numerical like that. There are all kinds of examples of the way targets distort. If you have an implicit or explicit target of GDP growth, then people will do what it takes to deliver that target, and that doesn’t necessarily correspond to what is best for society or citizens.

DAVID: This is a complicated issue because quality is so difficult to measure. Quantity, obviously, is the easier aspect. Services – let’s take, as an example, something like nursing care. It can be measured, if you want to look at productivity, and if you want to say that seeing more patients is an improvement in terms of productivity. But how do we measure this type of service when, I think, what you and I desire is more than just growth and productivity and improvement in a statistic, but we truly want an improvement in care. We want an improvement in positive patient outcomes. Again, this issue of quality versus quantity, what we want – this, I guess, is really at the heart of why GDP is valuable, but also, as you said earlier, bearing too much of a weight.

DIANE: It’s a really difficult problem now that so much of the economy is based on services – about 80% or more, a growing proportion, is service-based. And I certainly don’t know what my productivity is. I can spend days when I don’t seem to get very much written down, or many PowerPoints made, but I have some good ideas. And then other days when I spend eight hours in meetings and lots of things are agreed in the meetings, and then other days when, actually, I do sit down and I get a few PowerPoint presentations done. And if it’s very hard to say what my productivity is, when you look across the whole economy, how on earth do you begin to capture that sense of the quality of the productivity of the services being delivered?

And as you’re saying, even something that looks pretty straightforward like nursing, surely it depends. If you have a nurse who is doing blood tests, then if they can get through twice as many patients in a day that might be something you want to record as a productivity improvement. If it’s a nurse in an intensive care unit looking after a premature baby then that’s something completely different. I think we need to spend much more time, as economists and political people, thinking about what kind of outcomes we want from the economy now that, in the affluent West at any rate, the question of increasing material output just isn’t as important any more.

And this goes to new goods, as well. When you’re thinking about innovations in biotechnology or in the digital sector, surely, we just don’t want more cars on the road, we want to think about the characteristics of them, and we want to think about the quality of the software that is being created and not just the number of lines of codes. This definitional problem is pretty profound, I think, and we haven’t begun to get a handle on it.

DAVID: This is, perhaps, a controversial approach, but here we are talking about statistics, which to some people seems a very dry topic. You mentioned somewhere in your book that in an election year some governments allow for a bit more inflation in hopes of improving the economy and employment, and prospects for re-election. Yet, if there is more inflation, arguably the deflator, net component and GDP, would subtract from GDP growth. Theoretically, Diane, can you increase inflation for political gain, and then circle back around and contain the consequences by shifting weightings within the CPI so that the deflator does not detract from overall GDP growth?

DIANE: The evidence about what is called a political business cycle looks back at a number of countries over quite a few decades and there is this observable correlation that government spending goes up, the economy expands, and inflation starts to go up ahead of elections because governments want voters to feel good. And then, after the election, they need to hold back inflation, so monetary policy and fiscal policy get a bit tighter, unemployment goes up a bit, and that’s the kind of pattern that is observed. One of the reactions to that was the move to make central banks like the Fed independent and pretty much most of them are now, so that has removed one of the levers, the fiscal lever, of course.

But that was in a world where we had inflation and we don’t have that anymore, we’re in a very low inflation world so it’s a kind of different picture. And there is a different driver now, which is the technological revolution, and we’re probably, actually, still over-estimating what has happened to prices. I think they’re probably falling much faster than recorded in the official statistics, so real growth is increasing compared to what the statistics suggest it to be. I don’t think economists and statisticians have got their heads around this. I don’t really see that it’s very easy for politicians to manipulate that.

DAVID: There is something that you note is a challenge, also, for GDP, and that is the informal economy, how to bring that in and calculate the inputs from the informal economy. I was a bit surprised to see economic growth boosted, or rather, the official GDP statistics improved, when a number of European countries decided to include prostitution and illegal drugs in their figures (laughs). And I didn’t know if at the time this was just sort of a desperate attempt to improve the number by any means necessary or if this was just a careful, calculated approach to looking at the full scope of the economy.

You quote Friedrich Schneider’s study showing that there has been a significant growth in the shadow economy due to an increase in tax burdens, due to Social Security payments, things of that nature, where people just basically are opting out, making it even more important for an economist to try to wrap their arms around this informal economy.

DIANE: The trouble is that just recently the statisticians have been tripped up by their own logic. Their logic is that GDP is a measure of all marketed activity in the economy and the definition doesn’t tell them whether that means to be legal or illegal marketed activity. And because there are some variations in Europe, depending on what’s legal or not, they thought they would harmonize everything and include all illegal marketed activity, as well. To be honest, I’ve got no idea how they collect the statistics for illegal drugs and prostitution. You can’t imagine statisticians with their clipboards going out and asking the price of services, for example, can you? But that’s what they’ve done, and now we have this bizarre situation where illegal marketed activity is included in our assessment of how well the economy is doing.

But all kinds of productive things are not included because they’re not marketed. The old example is, work in the home, caring for children and family. The newer examples are things like writing open source software, or contributing to Wikipedia, and those are clearly economically productive activities, but again, are not being counted. One of the things the tech sector very strongly believes is that the current definitions really don’t take account properly of what they’re doing.

DAVID: As we wrap up, I want to end with maybe a reflection on what we should be looking at. As helpful as GDP is, and as we’ve looked at some of the holes there that need to be filled, you reference some of the Victorian models which looked not only at quality, but really, with the future in mind, we should make decisions and measure our investments and our progress perhaps with legacy in mind. That’s what you were suggesting. Maybe you could expand on that as we conclude.

DIANE: I think there are two real gaps, and the most important one is exactly the one that you’ve touched on. We need to have some grasp on what assets we have in the economy, as well as the flow of income and activity from year to year, and that will make us much less short-term, and make us pay much greater attention to the legacy that we’re leaving for future generations. And I would aspire for us to do something as magnificent as the Victorians did in building the economies that we have today in the first place. So I think that’s a really important thing. And I would have quite a wide definition of those assets. I would include the government budget situation, personal debt, on the negative side. I would also include infrastructure and human capital and natural capital, as well. I think we ought to have some understanding of all of those things.

But the other gap is what is happening to Middle America and what’s happening to the man on the omnibus, I guess, is our equivalent over here. So some sense of the distribution of growth, as well, because for many decades now a lot of Americans, a lot of Britons, a lot of other Europeans, have not seen any progress in their standard of living. And that has been exceptional, not just for the 20th century, but for most of the 19th century, as well, and I think that’s one of the reasons we’re seeing a kind of very uncivil political debate that both sides of the Atlantic are having these days, because people are angry about that, people are angry about the sense that they don’t have some things for their children and grandchildren to look forward to. And that is partly about building for the future, but it’s partly about making sure that the gains are widely shared, as well.

DAVID: I read the book shortly after ordering it on Amazon, and there will be another Amazon order this afternoon for The Economics of Enough, one of your other titles. You have written quite a few books. I would encourage our listeners to consider both The Economics of Enough and GDP: A Brief but Affectionate History, as they seek to understand the world we live in, making wise decisions, both personally, and encouraging the same at the level of public policy.

Thank you, Diane, for your contribution, your time today. Thank you so much.

DIANE: I’ve enjoyed the conversation. Thank you so much.

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KEVIN: Dave, I’m glad you asked the question, what should we be looking at? Measurement of any type of statistic, anything that applies to real life, is so important, because as in the question you asked, when does the actual number that you’re going for become the target and you start losing focus as to what is actually important?

DAVID: I like the word that Diane used. If we could harmonize our highest ideals and interests as a culture and say, “These are all the things that we would like to focus on, and keep as priorities in front of us.” How you measure that, how you measure progress, is going to be as complicated, if not more complicated, than as we’ve seen today, calculating GDP is, but perhaps with a better outcome.

KEVIN: Every economic student, when they get into their first macro-economic class, learns that GDP is the measure of growth, and they learn that it’s consumer spending – and I emphasize spending – that it’s investment spending, and that it’s government spending. And then, of course, they measure out the exports and the imports, but the point is that it’s all about spending. When we have talked about what money is, money is something that you use when you can’t build it yourself. I’ll use a Victory Garden as an example. Let’s say that we were measuring the productivity of farmers selling produce to the rest of the world, and to our own people, and we come into a situation like World War II where people are encouraged to grow their own garden – a Victory Garden. That would be a very productive, wonderful thing, if everyone had some degree of self-sufficiency, but it would drop the GDP, the way it’s currently measured, through the floor.

DAVID: That’s right. So, some of the things that we should be thinking about, as Diane mentioned, whether it is working at home, taking care of your kids, home educating your kids, developing open source software – these are all things that are very valuable, but don’t get counted, and so, from that standpoint, are actually discounted by the way we pursue growth, if you remember our conversation with Tomas Sedlacek, as if growth was the measure of all things, and what we should always have as our priority.

KEVIN: Right. And we see GDP change, and she brings this out in the book fabulously, it depends on what it is we need. In the 1930s we needed employment, so we measured by how many people were employed.

DAVID: But you’re talking about something very unique with self-sufficiency. Go back a minute, because what you mentioned with the Victory Gardens, GDP captures other things, but it doesn’t capture self-sufficiency.

KEVIN: Right. In fact, money, and the spending of money actually shows inter-dependency. You only spend money with someone, again, when you don’t grow it yourself. And so, in a way, the use of money, and the measurement of GDP, is the inverse of self-sufficiency. That is inter-dependency, and there is nothing wrong with that, but obviously, self-sufficiency and the long-term approach with legacy, family, what have you, is very, very important. I love the fact that Diane has not missed that in writing a book on GDP.

DAVID: So you have specialization, you have complexity, you have interdependence. All of these things are very intriguing, but it doesn’t capture all of what life is, including some of the things that we are naturally self-sufficient with. I fixed dinner at home last night. That didn’t get factored into – except from the vegetables that I bought, and the meat that I bought, and the natural gas that I used to grill – I did buy those things. But we actually robbed society of a higher ticket item by not eating out.

KEVIN: By not eating out and going to the specialists. Going back to what we were talking about before, too, as we measure things, we measure what is important to us. Like the 1930s was the measuring of employment, the 1940s was the measurement of war – how do you pay for a war? The 1950s was the measurement of the rebuilding after the destruction of assets. Then we went into the Cold War period and we needed to measure so that we could look like we’re beating communism. So, at this point, and especially after the discussions that you had with Doug Noland the last couple of weeks, we’re measuring what at this point? What is important to us? We’ve gotten so far into debt, what is the measurement right now that we should be looking at?

DAVID: I think it’s a good time to stop and ask that question. What is important to us?

By | 2016-09-02T10:55:31+00:00 September 2nd, 2016|Transcripts|